Strong interest seen in Monarch Gold15th July 2008, 8:15...

Strong interest seen in Monarch Gold

15th July 2008, 8:15 WST



Monarch Gold Mining administrator Bryan Hughes says he is not surprised by the high level of interest from potential bidders, even before he calls for expressions of interest for the collapsed Goldfields miner’s assets.

Mr Hughes, of Pitcher Partners, would not reveal the names of parties that had approached him but said the turmoil in markets had turned investors’ focus on to gold assets.

More than half a dozen companies had approached him so far, he said.

“There are lot of people very bullish about gold at the moment, and they are some quality assets amongst (Monarch),” he said.

Monarch’s creditors will meet for the first time next Monday, just over a week after the miner’s managing director Michael Kiernan appointed Mr Hughes as the voluntary administrator following a bust-up with main lender Territory Resources.

Territory is owed about $21 million and is also Monarch’s biggest shareholder with a 19.9 per cent stake.

But a falling-out between Mr Kiernan and Territory meant the two sides could not agree on an appropriate debt repayment schedule for the cashstrapped gold producer.

Mr Kiernan is expected to be among those submitting a recapitalisation plan to Mr Hughes, who expects the high level of interest in Monarch to result in all debts being repaid.

Monarch’s assets include the mothballed Davyhurst mine, which triggered Monarch’s collapse; the fledgling Mt Ida underground mine; the Minjar asset which is the subject of a stalled $11 million sales agreement; and the Mt Magnet assets which Monarch was in the process of acquiring from Harmony Gold.

Monarch’s total debts are about $30 million, with another one-time Kiernan company, India Resources, among the other creditors. India said yesterday it was owed $3.5 million.

India said it was considering whether to raise capital in the interim to allow it to advance projects in India.

PETER KLINGER